MRS. NEENA SANDHU, MEMBER

1.       This is an appeal filed by the complainant against order dated 29.5.2008 passed by District Consumer Disputes Redressal Forum-II, UT, Chandigarh (for short hereinafter to be referred as District Forum) passed in complaint case No. 389 of 2007.

2.       Brief facts of the case are that the complainant is a farmer and in the month of November, 2005 he purchased 30000  Stevia Plants for Rs.7.50 each plant. The complainant got insured the Stevia Plants with the OP i.e. Oriental Insurance Company Limited for one year from 18.11.2005 to 17.11.2006 for Rs.2,25,000/- by paying a premium of Rs.7439/- against cover note No.09638 dated 17.11.2005. In November, 2005 the complainant planted the Stevia Plants on his farm under guidance and supervision of the suppliers of Stevia Plants and required fertilizers and medicines against termites and insects etc. were used. It was submitted by the complainant that during the month from mid December to mid February, the whether conditions were severely cold and due to the adverse weather conditions, more than 5000 plants decayed and perished. These severe weather conditions also had an adverse effect on the growth and health of the surviving plants, which could not grow with vigour and their growth was subdued. On 7.4.2006 the complainant sent a letter to the OP claiming compensation for the mortality of 5000 Stevia Plant, due to above reasons, under the insurance policy of the Stevia Plants. It was further submitted by the complainant that instead of compensating the complainant for loss of 5000 Stevia Plants and having the loss assessed, the OP issued a back dated cheque on 5.4.2006 for Rs.4863/-. The said cheque has not been encashed by the complainant till yet and also sent a back dated letter of 6.4.2006, through registered post on 12.4.2006 and the same was received by the complainant on 15.4.2006 which was a mischievous and fraudulent act and after thought for non-payment of claim which is falsified by their own documents by sending the cheque and letter above mentioned regarding cancellation of policy, read on 15.4.2006. It was further submitted by the complainant that during the months of May, June, July and mid August, due to excessive heat and high temperature, the remaining Stevia Plants withered away and perished as there was no rainfall in the monsoon season. Thus there was a total loss of the entire crops of 30,000 Stevia Plants. It has been next submitted by the complainant that earlier the complainant filed complaint before District Consumer Disputes Redressal Forum, Patiala but the learned District Forum, Patiala dismissed this complaint as it had no legal territorial jurisdiction and directed that the complaint be filed before the Forum having territorial jurisdiction. As per the version of the complainant that the complainant spent about Rs.30,000/- for the purchase of Stevia Plants and its insurance premium, on preparation of land, manure, chemical fertilizers, transplantation of plants, four hoeing given to the plants and the fields and without any reason given, the OP cancelled the policy. This act of OP to cancel the policy is unethical, unlawful, hypocritical after the policy has been issued about 5 months back prior to 6.4.2006 which was done just to frustrate the claim of the complainant. This act of OP amounts to deficiency in service on its part and due to this complainant has gone through a lot of mental agony, harassment as well as lot of financial loss by denying him the due compensation.

3.       Reply was filed by the OP and took some preliminary objections stated that complainant has no cause of action as the OP had issued plantation Horticulture Insurance Policy for Stevia Plants for the period commencing from 18.11.2005 to 17.11.2006 for a sum of Rs.2,25,000/-. It was pleaded that on 4.4.2006 the said policy was cancelled by the OP and cheque of Rs.4863/- was also sent to the complainant on pro rata basis by refunding the remaining amount of premium given vide letter dated 6.4.2006 and cheque dated 5.4.2006 was issued as at Annexure R-2. Therefore, no deficiency in service on the part of OP on account of the cancellation of the insurance policy, which was duly intimated to the complainant and no insurable interest existed between the complainant and the OP on 7.4.2006. The insurance policy issued to the complainant was cancelled in accordance with the terms and conditions of the policy, therefore there was no negligence or deficiency in service on the part of OP. The condition No. X of the policy clearly stipulates as under:

“The Company may cancel this policy be sending seven day’s notice be registered letter to the insured at his last known address and in such event will return to the insured the premium paid less the pro-rata portion thereof for the period of the policy has been in force or the policy may be canceled at any time by the insured on seven day’s notice and (provided no claim has arisen during the current period of insurance), the insured shall be entitled to a return of premium less premium at the company’s short period rates for the period the policy has been in force”.

It was further pleaded that in view of the above, the policy issued to the complainant was cancelled on 4.4.2006 and cheque of Rs.4863/- was also sent to the complainant on prorata premium. The policy was cancelled on account of the fact that coverage of Stevia Plants under Plantation Horticultural Insurance Schedule for this type of plantation was not available. It was averred that the letter dated 22.3.2006 regarding rectification of the policy issued to the complainant (Annexure R-5). The complainant was estopped by his own act and conduct to file the present complaint as the young Stevia Plants were sensitive to low temperatures and one should wait until any chance of frost has past and soil temperature are warm enough at the time of transplanting them into the garden. Therefore, the complainant himself was at fault while planting the plants in the wrong month.

          On merits the OP denied that plants were planted under the guidance and supervision from the supplier of the Stevia Plants and the required fertilizer and the treatment against termites and insects were given. It was denied that any letter dated 7.4.2006 was ever written by the complainant as there was no privity of contract between the complainant and OP on the said date. It is stated that since the policy already stood cancelled on the date of making claim, the complaint was nothing but an after thought on the part of the complainant to tarnish and malign the reputation of OP. Hence, it was prayed that the complaint may kindly be dismissed with costs.

4.       The parties led their evidence in support of their contentions.

5.       The learned District Forum allowed the complaint in part and directed the OP to make the following payments to the complainant:-

i)                   A sum of Rs.37500/- as the cost of 5000 Stevia Plants purchased by the complainant @ Rs.7.50 per plant for the horticulture crop loss incurred by the complainant due to the decay withering and perishing of these plants due to adverse weather conditions. 

ii)                 An amount of Rs.10,000/- as compensation for the physical and mental harassment and agony suffered by the complainant due to loss of his crop and repudiation of claim by the OP.

iii)               Rs.2500/- as cost of litigation.

The above said order be complied within 30 days from the date of receipt of certified copy of the order, failing which interest @ 15% p.a. would also be payable by the OP to the complainant from the date of this order till the date of realization, apart from the other amounts payable to the complainant as above.

6.          Aggrieved by the order passed by the learned District Forum, the present appeal has been filed by the complainant for enhancement of compensation. Ms.Harveen Kaur, Advocate has appeared on behalf of appellant and Sh.Ashwani Talwar, Advocate has appeared on behalf of respondent.

7.       In appeal, it is submitted that the learned District Forum has ignored the plea that the policy was valid till 17.11.2006 after keeping it in existence for about five months by the respondent and the cancellation of policy was done intentionally to deny the claim of the appellant totally. This cancellation of insurance policy was done without any prior notice or reason of cancellation by the respondent after about five months. It has been submitted by the appellant that the policy should have been valid till 17.11.2006 as the learned District Forum held that the cancellation of policy is evidently manipulated, fabricated and false with a clear-cut and sole motive to repudiate the claim of the complainant. This is highly unfair trade practice on the part of respondent, which needs to be discouraged by all means. The learned District Forum has only allowed a compensation of Rs.10,000/- for physical and mental harassment and agony suffered by the complainant due to loss of crop and repudiation of claim by the respondent. This amount is too meager and needs to be enhanced. The learned District Forum has not allowed interest to be paid on Rs.37,500/- from 6.4.2006 when the claim was filed and subsequently the policy cancelled by respondent, till payment. Thus the appellant claims interest from 6.4.2006 till payment made by the respondent. By this appeal, the claimant claims total compensation of the policy of Rs.2,25,000/- of which only Rs.37,500/- has been allowed by the learned District Forum as the policy was valid till 17.11.2006. Hence, it is prayed that the balance claim in the appeal for Rs.1,88,000/- (i.e. Rs.2,25,000/- - Rs.37,500/-) may kindly be allowed due to loss of entire crop of the appellant against the insurance along with costs of appeal.

8.       We have heard learned counsel for the parties and also perused the record.

9.         After hearing the learned counsel for the parties and having gone through the record, we are of the considered view that the complainant has successfully established that there is deficiency as well as unfair trade practice on the part of Ops and the learned district Forum has rightly allowed the complaint and awarded compensation for an amount of Rs.37,500/- as the cost of the 5000 Stevia Plants purchased by the complainant @ Rs.7.50 per plant. The complainant assailed the impugned order of learned District Forum and filed an appeal. In the first ground of appeal, the complainant submitted that the learned District Forum has awarded a compensation for an amount of Rs.37,500/- but this is without any interest whereas the complainant is entitled for interest on the compensation awarded by the learned District Forum.

10.       Even, we are of the view that complainant is entitled for the rate of interest as prevailing in the market on the awarded amount because the OP has wrongly repudiated the claim of the complainant and did not release the amount for the damages in time. Therefore, in our view the complainant is entitled for interest on the awarded amount.

                        As regards the second ground of appeal regarding the compensation for mental and physical harassment. It has been alleged by the complainant that the compensation awarded for mental and physical harassment by the learned District Forum is very meager. While taking into consideration, the loss incurred by the complainant due to the mortality of the Stevia Plants and keep[ing into consideration the mental and physical sufferance of the complainant, we feel like to enhance the amount of compensation from an amount of Rs.10,000/- to Rs.20,000/- along with litigation expenses of Rs.5,000/-.

                        As regards to the third ground of the complainant regarding the compensation for the total loss to the tune of Rs.2,25,000/- is hereby declined because the complainant has failed to prove that there is any pending claim with the OP. Not only this, inspite of many opportunities granted by the learned District Forum for placing an additional evidence, the complainant failed to do so.

            11.       In view of the foregoing discussion, the appeal filed by the complainant for enhancement is partly allowed. The impugned order passed by the learned District Forum is modified to this extent and the OP is directed

            i)          To pay a sum of Rs.37500/- as the cost of 5000 Stevia Plants purchased by the complainant @ Rs.7.50 per plant along with interest @ 6% p.a. from the date of passing of the impugned order by the learned District Forum i.e. 29.5.2008 till realization.

            ii)         To pay a sum of Rs.20,000/- as compensation for mental and physical harassment.

            iii)        To pay a sum of Rs.5,000/- as costs of litigation.

            We further direct the OP to comply with the aforesaid order within 45 days from the date of receipt of copy of order, failing which interest @ 12% will be charged from the date of order passed by this Commission till its realization.

            12.            Copies of this order be sent to the parties, free of charge.

Pronounced.

23^rd August, 2010.